PUC Efficiency Investigation Shows Columbia Gas Could Save Additional $200,000 Annually

HARRISBURG— According to an audit report released by the Pennsylvania Public Utility Commission (PUC), Columbia Gas of Pennsylvania Inc. (Columbia Gas) could realize annual savings of up to $200,000 by implementing recommendations contained in the report.  

These savings are in addition to the $11.5 million annual savings that the company has already realized by implementing recommendations from a Focused Management and Operations Audit report released in August 2006.

The Commission has voted 5-0 to make the audit report and the company’s plans to address those recommendations public. The PUC has now completed a Management Efficiency Investigation (MEI) that examined the company’s progress in implementing 24 of the 30 recommendations from the prior management audit report and its emergency preparedness efforts. 

According to the MEI, Columbia Gas has effectively implemented 16 of the 24 prior recommendations reviewed and taken some action on the eight remaining recommendations. Some of the changes made by the company include: 

• Refinanced its long-term debt through NiSource Corporation which resulted in an annual interest savings of $4,275,000.
• Increased its capital investment for replacing its infrastructure.
• Significantly decreased its residential receivable gross write offs resulting in an increased cash flow of approximately $3.1 million annually.
• Implemented the process of allocating the customer call center expenses based upon the number of call minutes applicable to the distribution companies, resulting in an estimated $1.6 million annual savings.
• Realized an annual increase in net collections.
• Allocated charges to affiliates for the use of the main office.
• Implemented controls to limit employee access to financial, customer, and employee data.
• Revised contractor meter reading performance targets.

In addition, the Audit Staff made ten recommendations for further improvement that include:

• Expedite the installation of dispatching software which accurately tracks dispatching time and has data archiving abilities.
• Conduct an internal audit that specifically tests Columbia Gas’ allocation process and the related charges to and from the affiliates.
• Strive to control the high levels of overtime experienced by individual field employees.
• Implement changes to decrease emergency response times after normal hours and during weekend/holidays periods.
• Accurately and effectively track line hits and damage collection success.
• Continue to utilize newly formed collection practices and continue with the planned reinstitution of secondary collections.